“Credit unions are formed when a number of people get together, pool their resources and say, ‘We’re going to use these funds that we’ve collected among us and lend it to others within our group so they can improve their lives … and then we’ll all benefit from that,’” says Patrick Keefe, spokesman for the Credit Union National Association.

When it comes to services, credit unions generally are comparable to banks. Interest rates, however, typically are more consumer-friendly. A September 2011 National Credit Union Administration comparison of average interest rates at credit unions and banks indicated that, on average, credit unions offered higher returns on certificates of deposit and money market and checking accounts. The average interest rates on new car loans were nearly 1.5 percentage points lower at credit unions.

One of the downsides is that credit unions usually have fewer branch offices and ATMs. Also, because of statutory limits, the amount of a business loan available is limited compared with a bank loan.

If you want to join a credit union, identify one for which you are eligible for membership. Check with your employer’s human resources department to see if the company is affiliated with a credit union.

“Check with your church or place of worship because there are many credit unions associated with them,” Keefe says. “There are even a number of credit unions chartered around schools, their employees, pupils and parents of pupils.”